Say NO to Rubin (Page 2)
Why should we support Rubin with this merger? I intend to vote NO with my shares for two main reasons:
1. It is too cheap to sell DOCS to Hummingbird for $8.50 a share, and now with HUM's share plunging, it will probably be even less. IMO, this deal is favourable to HUM, but not favourable to DOCS . DOCS shareholders have been significantly poorer, seeing our investment dollars used to expand new product lines, buying Fulcrum, and investing in market penetration. Why should we sell now to HUM for peanuts? Rubin talks about synergy between the two companies. What synergy???? HUM's main business is in connectivity, and its Businss Intelligence business is fledgling. When only 2.5 years ago DOCs shareholders paid over $20 to invest in this company, it is pure piracy now to sell to HUM for $8.50.!
So why is Rubin doing this? This brings to my second reason why we should say NO to Rubin.
2. Why would DOCS CEO decide at this point in time, when sales are materializing, when the new products lines are completed, when Fulcrum is integrated, to sell DOCs for peanuts? The problem with DOCs is simply one of bloated costs. All it takes is for a CEO concerned over shareholders wealth, to cut the fat, and bring back the earnings. I can't think of any good reason for a CEO of DOCs to sell the company at this time just when the harvest is around the corner for all the planting and toil of past years. The only reason I can come up for a CEO to sell DOCs at this juncture, is a selfish one... namely, to look after himself instead of the shareholders. And because of this, I again say NO to the merger.
When we say NO to the merger, the chances of the outcome to be more favourable than the $8.50 peanut price sale to HUM, is pretty good. HUM needs DOC's business to build a KM/BI integrated package so I suspect it will anti up higher. It has the money to anti up. This deal is a steal... paying $8.50 to get software which cost past shareholders $30/share to build. If I were a HUM's shareholder, I hope this deal goes through. For $8.50 plus a job offer to Rubin, I get to plunder.
If the merger don't go through because the shareholders reject it, then I don't see Rubin staying around, unless he has unashamed thick skin. Even if he does, I think his days are numbered. There will be more suitors, and this time, he won't be offered a cushy job to stay on. It may just be as well that HUM don't get DOCs. The best thing that can happen is simply for another CEO to take over the helm - a CEO concerned for the bottom line - a CEO that can bring back credibility and institutional buyers for the stock. I don't think it is too difficult a job to turn DOCs around, and to bring its stock price back up to the $25 range. All it takes is a CEO focused on improving shareholders wealth.
For this possibility to happen, we have to say NO to this merger.
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